Cracking the Code of Insurtech for Inclusive Insurance in the areas of Climate Risk and Agriculture

The MEFIN Public Private Dialogue (PPD) in Inclusive Insurance, a gathering of insurance regulators and supervisors, insurance industry players and support institutions promoting inclusive insurance successfully kicked off yesterday, March 22, 2018 at the Galle Face Hotel in Colombo, Sri Lanka. MEFIN members from seven countries were joined by the Sri Lanka insurance industry players and international experts in trying to crack the code together for insurtech in inclusive insurance for climate risk and agriculture.

The event was opened by no other than the Deputy German Ambassador to Sri Lanka, Mr. Andreas Berg, who highlighted that Sri Lanka’s agriculture sector, which is 7.5% of GDP, is exposed to climate change. Extreme rainfall is happening. Drought has become more common. The German government supports the achievement of the Sustainable Development Goals (SDGs), particularly on food security. Germany’s focus in Sri Lanka includes MSME development and protection from climate risks. The goal of German government is to reach 400 Million people with access to Climate Risk Insurance by the year 2020. To achieve this, he emphasized, “digitalization, including use of blockchain technology, is a cross cutting priority”.

Host MEFIN member, the Insurance Regulatory Commission of Sri Lanka (IRCSL), through the Director General, Ms Damayanthi Shyamali Fernando, warmly welcomed her peers and underlined, “learning with peers is a foundation principle of MEFIN, and IRCSL is grateful to be part of this Network.” She also shared that the insurance industry has experienced 3-15% of growth year-on-year. The industry is consolidating through mergers and acquisitions and segregation of composite insurers. However, insurance penetration is still low at 1.21% of GDP. The conduct of PPD5 is timely because Sri Lanka has just launched the National Financial Inclusion Strategy. From the insurance side, the Strategy aims to recognize and regulate informal insurance activities. One of the outputs shall be the formulation of a Regulatory Framework on Microinsurance.

Munich Re Foundation’s Vice-Chairman, Mr. Dirk Reinhard, a staunch supporter of microinsurance, underlined in his opening message that there is a need to have all relevant stakeholders involved to make inclusive insurance work and this is what MEFIN is currently doing throughPPD5. Dirk highlighted,” the MEFIN network is a very good example of how different stakeholders can work together. Insurance has to be integrated in the broad risk management strategy. Education of clients is key. Enhancing trust of the low-income sector on technology is crucial. Do they understand digitalization? “. He emphasized, “Follow up after this dialogue is key. Our expectations are to see that learnings here are passed on and appropriate products are developed.”

Access to Insurance Initiative (A2ii), a global partnership to support regulators, was represented by the Head of Secretariat, Ms. Hannah Grant. She said, “A2ii plans to do more work in the region, leveraging from its expertise in following initiatives: innovation hub, development and publication of regulatory guidance in collaboration with IAIS.”

“Mincroinsurance Network (MiN) is committed to supporting MI through knowledge management and providing platform for dialogue of regulators and industry”, said Ms. Katharine Pulvemacher, MiNExecutive Director. She also explained that for a market to develop, it needs some push; and this is the purpose of MiN, which is working with other stakeholders in collecting market information for purposes of further analysis.

In the launching of the 5th MEFIN PPD Dr. Antonis Malagardis, Program Director of GIZ RFPI, an inclusive insurance expert and advocate, and Chair of the MEFIN secretariat underlined the impact of the GIZ RFPI Program and of the MEFIN Network in the following key areas:

To stimulate and prepare the participants for the panel sessions, which is the main format of MEFIN PPD, Mr. Peter van den Broeke, Senior Policy Advisor of the International Association of Insurance Supervisors (IAIS) gave a keynote presentation on the topic of proportionality in regulation. He underscored, “Supervisory measures should be appropriate to attain the supervisory objectives of a jurisdiction and should not go beyond what is necessary to achieve those objectives”. IAIS work links with GIZ RFPI and MEFIN through the use of regulatory instruments such as the Self-Assessment and RIA.

The MEFIN PPD continues. In depth discussion on cracking the code of insurtech for climate risk and agriculture will be tackled in the panel discussions. Participants attended on March 19 a workshop on technical issues on application of blockchain in inclusive insurance as preparatory and mind-opening steps for the upcoming panel discussions.